Is Gold rally Over Extended Now?

Team Veye | 10-May-2024

ASX Gold Stocks have been the best investing themes in the recent times. The rise in gold prices have been influenced by the Central bank purchases, geopolitical risk and growing demand in China, which is the world's largest consumer of gold, consuming up around 60% of global mine production, and around two-thirds of all annual global gold supply.

Gold Investing might have slowed down in the short term but looking at the strong demand, Best Gold Stocks have the potential to perform well in long term.

The Gold Companies to Invest in currently are

Perseus Mining Limited (ASX: PRU)

The company maintains an exceptional trajectory of substantial financial growth year over year, as evidenced by the remarkable consistency in growth across key metrics illustrated in the chart above. In terms of performance, the company has successfully achieved significant revenue growth over the past five years, with revenues reaching US$363 million in 2018 and approaching a threefold increase within 5-6 years, standing at US$959 million in 2023 with further noteworthy growth in the recently reported half-year period. 

Considered one of the Best Gold Mining Stocks, its earnings have experienced extraordinary rates of increase, accompanied by a substantial improvement in cash generation. Concurrently, the company has undergone a considerable expansion of its asset base, growing from US$680 million in 2018 to US$1.6 billion in 2023. This expansion is complemented by remarkable growth in cash balances and a reduction of debt to near-negligible levels, resulting in a successful deleveraging of the company's balance sheet. These actions have also contributed to improved liquidity and an increased book value for the company. The consistently improving net margins and the rising reinvestment rate, even in the face of an expanding scale of operations, signals robust and sustainable financial fundamentals that are poised to yield strong income and cash generation over the coming years.

St Barbara Limited (ASX: SBM)

St Barbara Limited's Simberi operations, currently in active gold production, are planned for a substantial expansion with ongoing exploration and resource upgrade activities aimed at supporting this expansion.

The promising 15 Mile project, with robust economic prospects, is progressing towards commercialization and represents one of the most advanced projects in the company's pipeline.

St Barbara maintains a promising commercial pipeline of opportunities, centered around its Atlantic and Simberi operations, which encompass multiple projects and deposits at varying stages of development.

St Barbara is actively pursuing profitability after experiencing significant increases in losses, with the lower operating costs associated with new projects and the improved production and sales activities contributing to this drive towards profitability.

Regis Resources Limited (ASX: RRL)

Regis Resources Regis is making steady progress towards finalizing and releasing its DFS and reaching a FID for the promising McPhillamys Project, paving the way for construction activities and initial production.

The company previously reported updates on the Mineral Resources at Tropicana, with Regis' 30% share of the Tropicana JV Mineral Resources Estimate (MRE) totalling 30 million tonnes at 1.8 grams per tonne of gold (g/t Au) as of 31 December 2023. Regis' 30% share of the Tropicana JV Ore Reserves Estimate amounted to 14 million tonnes at 1.5 g/t Au for 0.7 million ounces as of 31 December 2023.

Notably, its underground Reserves increased by 75% from 0.4 million ounces to 0.7 million ounces. Both Boston Shaker and Tropicana underground mines expanded Reserves in CY23, and a maiden Reserve was declared at the Havana underground following the completion of the underground Prefeasibility Study.

Over the past 5 years, the company has demonstrated consistent growth in its sales activities and revenue generation, as illustrated in the provided graphic. Revenues have increased from $654 million in 2019 to $1.13 billion in 2023. During this period, the company's asset base has expanded significantly compared to its levels five years ago. This expansion has contributed to bolstered shareholder and book value, as well as improved mining assets and production capabilities.


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